OUR CONTRIBUTION Northumbrian Water Group's Environment, Social and Economic Impact Report

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OUR CONTRIBUTION Northumbrian Water Group's Environment, Social and Economic Impact Report
OUR CONTRIBUTION
Northumbrian Water Group’s
Environment, Social and Economic Impact Report
FOR THE YEAR ENDED 31 MARCH 2019
OUR CONTRIBUTION Northumbrian Water Group's Environment, Social and Economic Impact Report
2   Northumbrian Water Group • Our Contribution        		3

OUR CONTRIBUTION                                       NORTHUMBRIAN WATER
NORTHUMBRIAN WATER GROUP’S ENVIRONMENT,                GROUP’S ENVIRONMENT,
SOCIAL AND ECONOMIC IMPACT REPORT                      SOCIAL AND ECONOMIC IMPACT
                                                       REPORT
CONTENTS										PAGE

                                                       ABOUT US:
WELCOME                                           4    Northumbrian Water and
                                                       Essex & Suffolk Water are
                                                       part of Northumbrian Water                           CUSTOMERS SERVED
                                                  5
                                                                                                                2,700,000
OUR CAPITAL ASSETS                                     Limited, which is a member
                                                       of Northumbrian Water Group
WATER FORUMS’ FIVE CAPITALS REPORT                6    Limited (NWG).
                                                                                                                        IN THE NORTH
OUR PURPOSE                                       8    We provide water and sewerage
                                                       services in the north east of
                                                       England under the brand name
OUR CAPITALS JOURNEY                              12   Northumbrian Water (NW) and
                                                       water services in the south east
                                                       under the brand name Essex &
OUR CONTRIBUTION STORY IN 2017/18                 14   Suffolk Water (ESW). We serve 2.7
                                                       million people in the north with                     CUSTOMERS SERVED
                                                  28
                                                                                                                1,900,000
Our key data                                           water and sewerage services and
                                                  32   1.9 million people in the south
Case studies
                                                       with water services.
                                                                                                                        IN THE SOUTH
THANK YOU                                         59

                                                       WE HAVE IDENTIFIED FIVE CAPITALS
                                                       THAT WE RELY ON AS A BUSINESS:

                                                         Financial            Manufactured   Natural       Human and          Social
                                                          Capital               Capital      Capital   Intellectual Capital   Capital
OUR CONTRIBUTION Northumbrian Water Group's Environment, Social and Economic Impact Report
4   Northumbrian Water Group • Our Contribution                                                                		5

WELCOME                                                                                                        OUR CAPITAL ASSETS
FROM HEIDI
                                                                                                               THERE ARE FIVE AREAS THAT WE RELY ON FOR OUR GOODS AND SERVICES,
                                                                                                               THESE ARE KNOWN AS THE FIVE CAPITALS.

I PASSIONATELY BELIEVE THAT OUR PURPOSE IS NOT ONLY TO
DELIVER THE ESSENTIAL SERVICES WE DO FOR CUSTOMERS,
BUT ALSO CONTRIBUTE TO SOCIETY IN SUPPORTING THRIVING
COMMUNITIES AND ENHANCING THE ENVIRONMENT ON WHICH WE
ALL DEPEND. WITH THIS IN MIND, I’M PLEASED TO INTRODUCE
OUR CONTRIBUTION REPORT FOR 2019, WHICH LOOKS AT
                                                                                                               1. FINANCIAL CAPITAL                 2. MANUFACTURED                   3. NATURAL CAPITAL
OUR INFLUENCE AND IMPACT IN THE WIDER ECONOMY, THE                                                                                                  CAPITAL
                                                                                                               Financial capital is the funds                                         Natural capital represents the
ENVIRONMENT AND SOCIETY.                                                                                       available for business activities,   Manufactured capital comprises    renewable and non-renewable
                                                                                                               whether generated by an              material goods or fixed assets    environmental resources that
Every day we provide the essential service of           striving to make a difference for our communities      organisation’s own operations        which contribute to the           all individuals and
supplying drinking water and safely take away the       and our customers. Measuring social value is           and investments or provided by       production process.               organisations are dependant on.
wastewater from millions of people. Our ambition        complex and challenging to do in a robust way. I am    financial institutions.
and the contribution we make goes far beyond this.      proud that we have carried out some pioneering
                                                        work with experts to understand this important area
Our impact and influence for our customers,
                                                        and of the fantastic results we are reporting.
community and environment spans across a broad
range of interests. To help us understand these         In the last year we have made strides in better
dependences and interactions, we use the                understanding our impact and influence on the
framework of the five capitals (see page 5). We first   natural environment; in moving towards
used the capitals as a basis to help us better          incorporating an environmental net gain philosophy
understand and impact and influence in 2017 when        into our business.
we launched our first Our Contribution report. Since
                                                        This report is another step in our journey providing
then we have been continuing our journey to better
                                                        us with a greater understanding of the overall
monitor, understand and deliver against the capitals.
                                                        impact of our business on all our capitals. I hope     4. HUMAN AND                         5. SOCIAL CAPITAL
As we continue our progress to understand our           you enjoy this report and seeing the progress we are   INTELLECTUAL CAPITAL
dependencies across all five capitals, we are working   continuing to make in this important area.                                                  Social capital is the networks,
to use this this information to make the best                                                                  Human and intellectual capital       relationships and connections
decisions - for nature, our customers, our                                                                     consists of people’s health,         between people, communities
communities and our business.                           Heidi Mottram CBE                                      knowledge, skills                    and institutions.
                                                        Chief Executive Officer                                and innovation.
To fully understand our impact across the five
capitals, is not a simple process. We have committed
to doing this openly, honestly and in a robust way.
                                                                                                               In our previous Our Contribution reports we have explained what capitals we rely on as we go about
While we report on a broad range of our performance
                                                                                                               our business as a water and wastewater company. We have been working this past year to truly embed
for regulatory purposes, our material impacts across
                                                                                                               our use of these capitals in some of the areas of our business; and indeed through our new Business Plan
the five capitals goes further than this.
                                                                                                               for 2020-2025.
Our Contribution report is aimed at stakeholders
                                                                                                               The capitals are at the heart of our organisation. We rely on the natural world to provide the resources
with a particular interest in our economic,
                                                                                                               that we depend on to deliver our services; we strongly understand the importance of investing in our
environmental and social impact. We share this
                                                                                                               human and intellectual capital; without our manufactured capital we would not be able to carry out our
information with our customers in a number of
                                                                                                               undertakings and; society provides the many and varied customers who rely upon the services that we are
other ways; including www.welivewater.co.uk.
                                                                                                               able to provide.
This reports sits alongside our Annual Performance
report and financial statements, which provide                                                                 Over the past year we have continued to work in-house and also with experts in the field. We are getting
more information on our financial and                                                                          a better understanding of how we can use the data we have, and how we can turn it from raw data into an
manufactured capitals.                                                                                         impact assessment. Hopefully this report will provide a good update and will take you along the next step
                                                                                                               of our journey.
In this update to Our Contribution, we have
particularly focused on understanding the social
impact of some of our key partnerships that are
OUR CONTRIBUTION Northumbrian Water Group's Environment, Social and Economic Impact Report
6   Northumbrian Water Group • Our Contribution                                                                   		7

WATER FORUMS’ FIVE
CAPITALS REPORT
WE WELCOME AND ENDORSE THE COMPANY’S APPROACH TO USING THE FIVE
CAPITALS AS A MEANS OF VALUING THE WORK IT DOES AND THE
CONTRIBUTION IT MAKES – NOTABLY TO SOCIETY AND THE ENVIRONMENT.

In terms of social capital, there are some leading      understand the environmental impact of decisions          Flooding in the past 10 years, and Lost Time
projects – StepChange and Powered By Water –            it makes. We believe that they could go even further      Accidents. We will seek to understand and
described in this report, which offer valuable case     still, by working with other utilities in their regions   constructively challenge the company’s plans to
studies to other organisations who may be               to take a joined-up, single approach to site ranking      improve in both of these areas.
considering a similar approach. In both cases, their    and net gain tools, which would aid Local
                                                                                                                  In conclusion, based on what we have seen and
success is down to a strong partnership approach to     Authorities, Non-Governmental Organisations, Local
                                                                                                                  heard so far, we commend NWL’s ambition for using
working – founded on the belief that bringing           Enterprise Partnerships and the like. With its strong
                                                                                                                  the five capitals approach and look forward to
together the right blend of interested organisations    organisational culture of, and track record in,
                                                                                                                  seeing how it progresses over the next 12 months
will deliver results that are greater than any one of   collaboration and partnership, NWL is well placed to
                                                                                                                  and beyond.
them could deliver alone.                               lead the way and make a very positive difference in
                                                        this regard.
From a natural capital perspective, we support                                                                    Jim Dixon
NWL’s adoption of an ‘environmental net gain’           There are two measures (shown in Key Data) where          Water Forums Chair
philosophy. Having a baseline valuation of the          NWL has delivered ‘unsatisfactory performance and         On behalf of the Forums for Northumbrian Water
biodiversity of its sites will enable NWL to            more work is needed’ in 2018/19: Repeat Sewer             and Essex & Suffolk Water
OUR CONTRIBUTION Northumbrian Water Group's Environment, Social and Economic Impact Report
8   Northumbrian Water Group • Our Contribution                                                                  		9

OUR PURPOSE
ALIGNING OUR PURPOSE TO OUR                              a significant contribution to reducing plastic          WE ENABLE EXTRAORDINARY                                LEADING
VISION AND VALUES                                        pollution, producing renewable energy, reducing         LEADERS
While we have always led with purpose and clearly
                                                         carbon emissions, preventing flooding and                                                                      POLLUTION
communicated our vision and values
                                                         improving public access to recreation. It’s not
                                                         enough to offset or compensate for loss of natural
                                                                                                                 Empowering people to know their purpose.
                                                                                                                 We work hard to give our people and the jobs they do
                                                                                                                                                                        PERFORMANCE
to our people and our stakeholders, we want to
                                                         resources, our operational activities should have a     a real sense of meaning. Working with a sense of       Especially proud of our leading pollution
explicitly define our true purpose; our reason
                                                         lasting positive impact on protecting and improving     purpose enables personal fulfilment. We foster a       performance. Following a couple of years where our
for doing what we do.
                                                         the natural environment too.                            high performing culture and value diverse              performance was not what we wanted it to be, we
Sustainability is at the core of our purpose. This                                                               perspectives and skills. We support our leaders to     have really focused on improving in this area and
means seeking to protect and enhance the                 WE ARE COMMITTED TO DELIVERING                          develop high emotional intelligence, enabling our      have transformed our pollution performance.
environment in everything we do; being the               WORLD-CLASS CUSTOMER SERVICE                            people to behave in the right and responsible way.
best we can in meeting our customers’ needs                                                                      Our aspiration is for all our people to have a great
and having a positive impact on the communities          Giving unrivalled customer experiences every time.      experience at work and understand the part their
where we operate; and making a financial                                                                         play to achieve our purpose and live our company
return so we are economically viable long into
                                                         We strive to give our customers leading customer
                                                         service in the water industry and beyond. Our           values. Our people have clear Outcomes and are                    SUNDAY TIMES TOP
the future.                                              customer service ethos is core to our brand, values     held to account, enabling them to take personal                      25 COMPANIES
                                                                                                                 responsibility as they contribute to our
OUR PURPOSE
                                                         and culture; our people have a drive and energy to
                                                         truly put our customers at the heart of everything      sustainability in a balanced way, always striving to                  TO WORK FOR
                                                         they do. We listen to our customers and are             be leading.
Water is life. Every living cell on earth needs water
to survive. The single most essential ingredient for     empowered to take action to help them. Our              You can read more about how we live our purpose in     Following our strategy to be a Great Place to Work so
human life to thrive, is clean drinking water. Our       customers are supported to participate fully in our     the case studies that follow in Our Contribution       that we can attract and retain the best talent, we
work is instrumental in fulfilling our basic human       business and in designing the services they receive.    report and in Our Annual Performance report            were delighted to be named one of the Sunday
needs and protecting the source of life.                 Every customer voice is important. Our people are       for 2019.                                              Times Top 25 Big Companies to work for.
                                                         passionate about delivering world-class customer
                                                         service; they know it is expected of them, and they     The things we are most proud of from 2018/19, that
WE ARE CUSTODIANS OF WATER                               are committed to it because they believe the            truly embody our purpose are:
Delivering reliable and resilient services that are      services we provide are essential to life and
                                                         wellbeing. We all want our customers to always have
                                                                                                                                                                        ETHISPHERE
vital to public health.
We are the current caretakers of the water in our
                                                         complete trust and confidence in what we do. We         SET UP WATER                                           MOST ETHICAL
                                                         own a customer’s problem, keep our promises and
regions, and we take this important responsibility
                                                         show each customer that they are special by             POVERTY UNIT                                           Reflecting our support for our people, environment
very seriously. Day to day our practical purpose is to
supply safe clean water, and effective remove and
                                                         focusing on individual needs. We know that every        FOR NEA                                                and communities, we were delighted to be named
                                                                                                                                                                        as one of the most ethical companies in the world
                                                         interaction with every customer matters.
treat wastewater so that our communities benefit                                                                 We've established the first national water poverty     by Ethisphere for the 8th time. We were again
from excellent public health. At a macro level our                                                               unit with National Energy Action (NEA) to establish    the only water company in the world to achieve
purpose is so much more; safeguarding the water          WE ARE THE LIFEBLOOD THAT FLOWS
                                                                                                                 an understanding of the issues, inform policy, be a    this accolade.
supply for future generations requires innovative        THROUGH OUR COMMUNITIES                                 best profile hub and to take practical action to
solutions, anticipating and instigating change,                                                                  eradicate water poverty in our areas. An early win
planning ahead and making the right long-term            Demonstrating our value and making a wider
                                                                                                                 this year was to sign 1,638 people onto our Water
decisions about how to run our business. While our       contribution to society.
                                                                                                                 Without the Worry programme.
ambition is strong, we set effective and sustainable     We are integral to our communities, always listening                                                                                        962 REFILL
targets, always considering the lasting impact we
leave behind.
                                                         to our customers so that we understand what
                                                         matters most to them and what their expectations
                                                                                                                                                                                                      STATIONS
                                                         are of us. We have a unique opportunity to be able to                                     EPA 4*               This year saw the launch of our Refill campaign in
WE ARE STEWARDS OF
                                                         operate a business that delivers public value.
                                                         Protecting the most vulnerable people in our society
                                                                                                                                                 COMPANY                partnership with City to Sea. The campaign is aimed
                                                                                                                                                                        at reducing the need for single use plastics by
THE ENVIRONMENT                                          drives us to eliminate water poverty and increase       The Environment Agency rated us four star in their     encouraging people to use refillable water bottles
                                                         the disposable incomes of those who need it most;       annual Environmental Performance Assessment.           rather than buying bottled water. In the first 12
Valuing the natural capital and ecosystems               reducing the worry they face. Working, living and       We were the only company to score as green across      months we've signed up 962 refill stations.
we depend on.                                            volunteering amongst our customers helps us to          all areas including serious pollution, supply
We hold ourselves to account on an ambitious set of      understand and foster a positive impact on the          resilience, and self-reporting of pollution. This is
indicators designed to protect and improve the           wellbeing of the communities we serve.                  the first time that any company has achieved this
environment within our regions, going well beyond                                                                excellent level of environmental performance
our regulatory obligations. We know our operations                                                               since 2012.
can be resource intensive but that we can also make
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10   Northumbrian Water Group • Our Contribution                                                                                                        		11

FIGURE 1: LINKS BETWEEN OUR
BUSINESS FUNCTIONS, KEY
ACTIVITIES AND IMPACT AREAS
                                                                                                                                WATER AND SEWAGE                                                     WATER RESOURCE
The diagram below summarises the key links                                                                                         POLLUTION
                                                                                                                                                         GREENHOUSE GASES                                                   GREENHOUSE GASES

between our business activities and the impact                                                                     WATER RESOURCE                                                                                                      WATER AND SEWAGE
areas identified. Examples of further detail on these                                                            MANAGEMENT AND USE
                                                                                                                                                                  FLOOD ATTENUATION
                                                                                                                                                                                                                                          POLLUTION

links is provided with the case studies.                                                              TRAINING EDUCATION AND                                                                                                                    TRAINING EDUCATION AND
                                                                                                                                                                                 ECONOMIC VALUE
                                                                                                            KNOWLEDGE                                                                                                                                 KNOWLEDGE

                                                                                        ECOSYSTEM SERVICES AND                                                                                                                                              CUSTOMER ENGAGEMENT
                                                                                                                                                                                  AIR POLLUTION
                                                                                                                                                                                                                                                                AND WELLBEING

                                                                                  FLOOD ATTENUATION                                                                                                                                                                 FLOOD ATTENUATION

                                                                                                                                                                                                                                                                     ECOSYSTEM SERVICES AND
                                                                                   ECONOMIC VALUE                                                                                                                                                                           LAND USE
                                                                                                                                                                                                                 WASTEWATER
                                                                                                                                                    CATCHMENT                                                    NETWORK AND
                                                                                                                                                   MANAGEMENT                                                     CATCHMENT
                                                                    GREENHOUSE GASES                                      RAW WATER
                                                                                                                         ABSTRACTION
                                                                     WATER RESOURCE                                                                                                                                                                                                              EMPLOYEE HEALTH
                                                                   MANAGEMENT AND USE                                                                                                                                                                                                             AND WELLBEING

                                                                    WATER AND SEWAGE                                                                                                                                                                                                            WATER AND SEWAGE
                                                                       POLLUTION                                                                                                                                                                                                                   POLLUTION

                                                                  ECOSYSTEM SERVICES AND                                                                                                                                                                                                         WASTE DISPOSAL
                                                                         LAND USE

                                                                                                         WATER SUPPLY AND
                                                                                                                                              WATER                                                        WASTEWATER                                   WASTEWATER
                                                                                                                                                                                                                                                       TREATMENT AND
                                                                 WASTE DISPOSAL                             NETWORK
                                                                                                                                             SERVICES                                                       SERVICES                                     DISCHARGE                                AIR POLLUTION

                                                                  AIR POLLUTION                                                                                                                                                                                                                  ECONOMIC OUTPUT

                                                                 ECONOMIC VALUE
                                                                                                                                                                                                                                                                                                GREENHOUSE GASES

                                                              WATER RESOURCE                                                                                                                                                                                                                  ECOSYSTEM SERVICES AND
                                                            MANAGEMENT AND USE                                                                                                                                                                                                                       LAND USE

                                                           CUSTOMER ENGAGEMENT                                                                                                                                                                                                                   EMPLOYEE HEALTH
                                                               AND WELLBEING                                                                                                                                                                                                                      AND WELLBEING

                                                              EMPLOYEE HEALTH
                                                               AND WELLBEING                                                                                                                                                                                                                     WASTE DISPOSAL
                                                                                                                                                                                                                                                        PROCUREMENT
                                                             GREENHOUSE GASES
                                                                                                         DELIVER CUSTOMER                  CUSTOMER                                                           SUPPORTING                                                                          AIR POLLUTION
                                                                                                           ENGAGEMENT
                                                                                                                                            SERVICES                                                           FUNCTIONS                                                                        WATER AND SEWAGE
                                                                                                                                                                                                                                                                                                   POLLUTION
                                                                                                                                                                                                                                                         BUILDING AND
                                                                                                                                                                                                                                                          FACILITIES
                                                                                                                                                                                                                                                                                                GREENHOUSE GASES

                                                                      ECONOMIC VALUE
                                                                                                                                                                                                                                                                                                 WATER RESOURCE
                                                                                                                                                                                                                                                                                               MANAGEMENT AND USE
                                                                                                                       SUPPORT INDEBTED
                                                                                                                        AND VULNERABLE                                                            WORKFORCE
                                                                                                                          CUSTOMERS              ENCOURAGE                                                                                      FLEET AND
                                                                                                                                             IMPROVED CUSTOMER                                                                                  LOGISTICS                                ECONOMIC VALUE
                                                                                                                                              WATER EFFICIENCY                                                        COMMUNITY

                                                                                       CUSTOMER ENGAGEMENT                                                                                                                                                                          WASTE DISPOSAL
                                                                                           AND WELLBEING

                                                                                                                                                          ECONOMIC VALUE                                                                                                      GREENHOUSE GASES

                                                                                                                                                                TRAINING EDUCATION AND
                                                                                                                                                                                                                                                            AIR POLLUTION
                                                                                                                                                                      KNOWLEDGE
KEY
                                                                                                                                                                                         EMPLOYEE HEALTH
                                                                                                                                                                                                                                      TRAFFIC
                                                                                                                                                                                          AND WELLBEING

           3
                                                                                                                                                                                                           COMMUNITY INVESTMENT
           2                                            Financial and manufactured capital
                         1. Business function
                         2. Key activities              Social capital
           1
                                                        Human and intellectual capital
                                                        Natural capital
OUR CONTRIBUTION Northumbrian Water Group's Environment, Social and Economic Impact Report
12   Northumbrian Water Group • Our Contribution                                                               		13

OUR CAPITALS JOURNEY                                                                                           OUR LEGACY                                             Project teams are looking at this legacy in its
                                                                                                                                                                      broadest sense with a focus on projects designed
                                                                                                                                                                      and delivered with the community in mind and that
                                                                                                               The way in which we invest money in our assets has
THIS YEAR WE HAVE CONTINUED OUR JOURNEY AND MADE SIGNIFICANT                                                   an impact on the value of all five of the capitals     enhance natural capital.
PROGRESS IN UNDERSTANDING OUR INFLUENCE AND IMPACTS IN A NUMBER                                                - how we chose to invest that money; the quality of    The lifecycle of our projects has been reviewed with
OF KEY AREAS FOR OUR BUSINESS.                                                                                 the assets that we create; the impact the programme    respect to legacy and the five capitals. A framework
                                                                                                               has on the natural world and the communities in        for analysis against the five capitals is being
                                                                                                               which we are working and; the learning that our        developed and will be included in the front end
This year we have continued our journey and            The work we carried out in 2017 identifying our key     employees gain from the work and the innovative        assessment of projects by the end of 2019.
made significant progress in understanding our         impact and dependency areas, showed how                 ideas they bring to it. We recognise we have both an
                                                                                                               opportunity and a responsibility to consider the       Some examples of how our projects are embracing
influence and impact in a number of key areas for      interlinked our work is with the natural world. To
                                                                                                               legacy our investments leave behind and we have        the legacy approach are:
our business.                                          enable us to start to collect more robust data on the
                                                       impact of our operations on natural capital, we have    been looking at how this can change the way in         • Our Killingworth flood reduction scheme, where
We recognise that the work carried out through our                                                             which we make our investment decisions.
                                                       made strides to better document the value of our                                                                 we are installing three floating ‘eco systems’ on
investment programme is an area where we have a
                                                       landholding, what opportunities there are for           In the last year we have been focussing on how we        Killingworth Lake, which will provide a home for
massive impact and dependency on all five of the
                                                       enhancement, and how changes to land use impacts        can ensure we leave the most positive legacy when        wildlife and increase bio-diversity in the area.
capitals. In the last year we have been focussing on
                                                       the value.                                              considering all of the five capitals. This approach      Children from a local primary school have helped
how we embrace the five capitals when designing,
                                                                                                               was launched at a conference we held with our key        to establish the eco systems with plants and
planning and carrying out work with the aim of
                                                                                                               supply chain partners in October 2018.                   shrubs, and learnt more about biodiversity
leaving a positive legacy behind.
                                                                                                                                                                        through the project. To mark the project we have
                                                                                                               This event, held in Durham with over 100 attendees,      also worked with the Natural History Society of
                                                       In the next section (pages 13-26), we describe the      was also used as a showcase for best practice and to     Northumbria to install new bat boxes at the
                                                       progress and what has been achieved in each of          inspire people to improve on the lasting legacy that     reserve, which will help to encourage bats to
                                                       these areas.                                            we leave through our investment projects. By             the area.
Due to our large customer base we provide with                                                                 engaging with our supply chain partners this
water and wastewater services, we know that we                                                                 provided an opportunity to better explain our          • We recently completed work on a £1million
can have a massive impact on the social value that                                                             capitals approach to them and develop shared tools       project to replace almost a mile of sewage piping
they derive from their interactions with us. This                                                              to monitor impact across our businesses.                 in the village of Escomb. As a ‘thank you’ to our
year we have worked with PwC to utilise their                                                                                                                           community we painted fencing at nearby Bishop
expertise in this area to help us measure and                                                                  With our partners, we have been working to ensure        Auckland Railway Station and will be refurbishing
understand the broader social impact of two of                                                                 our capital projects leave a lasting positive legacy     old benches on local green space.
our key partnerships; StepChange and Powered                                                                   for our communities as measured by the five
                                                                                                               capitals. An executive leadership team project is      • As part of our investment in modernising Riding
by Water.                                                                                                                                                               Mill pumping station we are working with the
                                                                                                               in place with the objective of delivering clear,
                                                                                                               visible and effective processes to enable the            Environment Agency to install new screens at the
                                                                                                               implementation of delivery projects that leave a         river intake to protect fish and eel populations.
                                                                                                               lasting positive legacy for our customers, based
                                                                                                               around the five capitals model.
OUR CONTRIBUTION Northumbrian Water Group's Environment, Social and Economic Impact Report
14      Northumbrian Water Group • Our Contribution                                                                		15

SOCIAL IMPACT EVALUATION

We have been working with PwC to better understand, evaluate and quantify the social value of some of our
work. We have set ourselves fourteen ambitious goals in our 2020-2025 Business Plan, which show how we
plan to contribute to society over the next five years. To help us understand how to quantify and increase
our positive impact, we worked with impact measurement experts from PwC’s Sustainability & Climate
Change team to assess the social impact of some of our current initiatives. The table below shows how
these initiatives link through to our ambitious goals.

                                                                                         Powered
     Ambitious Goals                                                       Step Change   by Water   Supply Chain

     End water poverty in our operating areas by 2030

     Promote confidence in our drinking water so that nine out of ten of
     our customers choose tap water over bottled water

     Spend at least 60p in every £1 with suppliers in our regions

     Be the most socially responsible water company

Where they were unable to truly quantify the impacts, PwC provided advice on how we could improve social
impact measurement for these initiatives.

The outcome of this work is on the following pages.
OUR CONTRIBUTION Northumbrian Water Group's Environment, Social and Economic Impact Report
16   Northumbrian Water Group • Our Contribution                                                                            		17

StepChange partnership                                     for them to work with the charity to put together an             The PwC report describes their assessment of the
                                                           action plan. StepChange gives advice on a range of               social impact we are having through this
We recognise that sometimes life’s ups and downs           issues, from debt to bankruptcy, and even has an                 partnership. Amongst other things, the report
mean that some customers may find themselves in            online benefits calendar on its website. The                     estimates that our partnership with StepChange
challenging financial situations. Whilst water bills       personal impact this partnership has on people                   created £300,000 for society in 2018, through
are a comparatively small part of total household           lives is paramount.                                             potential for improved physical and mental
costs, we are determined to do everything it can to                                                                         wellbeing, employment and productivity,
                                                           Our partnership runs alongside a range of support
help our customers.                                                                                                         repayments to creditors, and improved
                                                           available directly through our team and is part of our
                                                                                                                            financial management.
In 2014, we teamed up with StepChange Debt                 award winning Water without the Worry campaign.
Charity, in a first for the water industry, to create a    There is a case study giving greater details on this             We encourage all readers to review the full PwC
partnership to offer customers access to free,             on page 55.                                                      report to understand their work and conclusions
confidential debt advice and support. As the UK’s                                                                           about the impact we are having through this
                                                           We are committed to understanding and improving
largest debt charity, StepChange is a natural                                                                               important initiative.
                                                           our impact on society, so we asked PwC to conduct a
partner to entrust with such important and often
                                                           social impact assessment of the benefit this
sensitive matters for our customers.
                                                           partnership has to society. We are delighted to
Last year the partnership saw more than 1,600              publish their full report in parallel with this Our
referrals to StepChange. These referrals allow us to       Contribution report.
understand better each customer’s financial
situation and create an opportunity, and the time,

      1.         IDENTIFY BENEFITS FROM
                 DEBT ADVICE                                    2.         IDENTIFY NUMBER OF
                                                                           BENEFICIARIES                                    3.         ESTIMATE OUTCOMES
                                                                                                                                       ADJUSTMENT FACTOR                                4.        AGGREGATE IMPACTS

       We identified the expected social impacts from            We identified the number of beneficiaries based on         We estimated an ‘outcomes adjustment factor’ for            To estimate the social value from the Step
       the partnership’s debt advice based on the                data provided by Step Change to NWG on the number          Step Change’s debt advice based on the findings of an       Change partnership, we multiplied the value
       published literature.                                     of referrals, their demographic characteristics, and the   outcomes study conducted by Step Change found that          of benefits per beneficiary by the number of
                                                                 types of debt advice received.                             only certain groups change their debt situation for the     beneficiaries and the outcomes adjustment
       We identified two studies: Transforming Lives
                                                                                                                            better following initial advice sessions.                   factor to estimate.
       and The Economic Impact of Debt Advice of high            Our estimate is likely to be conservative, because we
       relevance and took a conservative approach,               do not include customers referred by NWG who use           The underlying social benefit values identified in step 1   We conducted sensitivity analysis to test the
       only quantifying benefits where both studies              Step Change’s online debt tool due to data limitations,    should - in principle - account for the extent to which     impact of changing key assumptions on our
       agreed that they were well evidenced.                     and we exclude customers who are not recommended           advice leads to outcomes. However this adjustment           results so that the reader can make their own
                                                                 a specific debt solution by Step Change. We also only      factor helps give confidence that only advice that leads    informed decision about how to interpret the
       We used values from Transforming Lives and
                                                                 focused on the demographic segments that have been         to a positive outcome is included. This results in a        findings.
       conducted sensitivity analysis to test the impact
                                                                 identified by Transforming Lives as being of particular    conservative estimate being calculated.
       of using values from The Economic Impact of
                                                                 interest to Step Change.
       Debt Advice on our results.
OUR CONTRIBUTION Northumbrian Water Group's Environment, Social and Economic Impact Report
18   Northumbrian Water Group • Our Contribution                                                                          		19

               INPUTS                                   ACTIVITIES                                  OUTPUTS            INTERMEDIATE OUTCOMES                  OUTCOMES                     IMPACTS

                                                                                                                                                           Reduced risk of            Reduced Criminal
                                                                                                                                                           desperation crime          justice system costs

                                                                                                                                                                                      Reduced cost of
                                                                                                                                                           Reduced risk of losing
                                                                                                                                                                                      moving/ becoming
                                                                                                                                                           a home
                                                                                                                                                                                      homeless

                                                                                                                                                                                      Reduced costs
                                                                                                                                                           Reduced risk of
                                                                                                                                                                                      associated with
       NWG contributes money                                                                  Customers’ prior water                                       relationship breakdown
                                                                                                                                                                                      relationship breakdown
       to Step Change                                                                         debt is written off
                                                   Customers receive
                                                   expenditure/ income                                                                                     Reduced risk of            Reduced cost of
                                                                                                                           Reduced debt                    children taken into care   childcare
                                                   pack proving eligibility
                                                   for reduced tariff
       NWG refers customers                                                                   Customers pay NWG’s
                                                                                                                                                           Reduced risk of losing     Reduced welfare
       to Step Change                                                                         reduced water tariff
                                                                                                                                                           employment                 benefits

                                                   Customers receive other
                                                   debt advice and support                                                                Reduced stress   Increased productivity     Increased GVA*

       Step Change spend                                                                     Customers put in
       time and money on                                                                     place plan to manage                                          Reduced health risks
       advisory activities                                                                   other debt                                                                               Reduced healthcare
                                                                                                                                                                                      costs
                                                                                                                                                           Reduced mental
                                                                                                                                                           health risks

                                                                                                                                                                                      Reduced costs
                                                                                                                           Adapted money                   Reduced risk of
                                                                                                                                                                                      associated with all
                                                                                                                           management behaviour            future debt
                                                                                                                                                                                      impacts
     Key

       In scope                                                                                                                                            Creditors avoid costs      Reduced costs of
                                                                                                                                                           of chasing payment         chasing debt
                                                                                                                           Structured payments
        Out of scope                                                                                                       to creditors
                                                                                                                                                           Creditors receive          Increased debt
                                                                                                                                                           higher repayments          received

*GVA is the value a company adds during its production process. It comprises employee compensation plus EBITDA,
or equivalently revenue minus spending on inputs. It show a company’s contribution to national GDP.
20   Northumbrian Water Group • Our Contribution                                                             		21

We do also offer other help to customers on low incomes, and have an arrears write-off scheme, so it makes
it even more impressive to see the additional value accrued from our partnership with StepChange – the
‘above and beyond’ aspect to our work.
The diagram below shows the central, upper- and lower-bound estimates of the social value created by our
Step Change partnership.

                                                   TOTAL POTENTIAL                         OUTCOMES                     BENEFIT PER                               TOTAL BENEFIT
                                                    BENEFICIARIES                         ADJUSTMENT                      PERSON                                     IN 2018
                                                                                            FACTOR

                        CENTRAL
                        ESTIMATE
                                                         357                    x                   64%      x                £1,330                    =               £300,000

                        LOWER-
                        BOUND                            357                    x                  100%      x                 £470                     =                £170,000
                        ESTIMATE

                        UPPER-
                        BOUND
                        ESTIMATE
                                                          714                   x                   64%      x                 £470                     =                £330,000

                                                                                                             Total benefit rounded to nearest £’000. Other figures rounded to nearest whole number.
22    Northumbrian Water Group • Our Contribution                                                                                         		23

Powered by Water                                                      While that report identifies some evidence to                       The diagram below shows two key potential
                                                                      suggest benefits from the programme,                                outcomes from Powered by Water, both of which
We have partnered with sports clubs to deliver the                    including the avoided cost of type 2 diabetes at                    can be linked to health benefits.
Powered by Water programme that educates 8-12                         approximately £85,000 per case, it’s also clear
year old school children on the importance of
drinking water.
                                                                      to us that there is some way to go to
                                                                      demonstrate the lasting changes in behaviour
                                                                                                                                          PwC estimated that
We asked PwC to conduct research on the potential
                                                                      that drive impact. For example whilst evidence
                                                                      from the academic literature suggests that the
                                                                                                                                          the value to society
                                                                                                                                          per avoided case of
long term impacts of this type of education and,
                                                                      programme may produce a positive impact on
based on this, to identify the potential benefits from
                                                                      children’s healthy drinking habits in the very
                                                                                                                                          type 2 diabetes is
the Powered by Water programme.
                                                                      short-term, it is unlikely to produce long-term
The PwC report describes their assessment of the                      effects when implemented in isolation, and
potential benefits of Powered by Water and the level
of evidence that is available to support these
                                                                      the absence of data collection on outcomes
                                                                      means it is not possible to establish impact
                                                                                                                                          approximately £85,000
potential benefits.                                                   with certainty.

          INPUTS                          ACTIVITIES                          OUTPUTS                                                                 OUTCOMES                                                 IMPACTS

                                                                                                                                            Reduced food                                  Reduced cases
                                                                                                                                            consumption                                   of cardiovascular
                                                                                                                                                                                          disease
       Materials
                                                                                                                                                                                                              Increased
       provided by                                                                                                                                                    Reduction in
                                                                                                                                                                                                              Healthy Life
       NWG                                                                   Children are                                                                             obesity
                                                                                                                                                                                                              Years*
                                                                             educated in
                                          Powered by                         the importance                                                                                               Reduced cases
                                          Water sessions                     of water                                                                                                     of Type II
                                          delivered                          consumption                                                                                                  diabetes
       Materials and                                                         and healthy
       facilitation                                                          lifestyle choices                                                                                                                Reduced
       provided by                                                                                                                                                                                            healthcare
       partners                                                                                                                             Reduced                                                           costs
                                                                                                                                            consumption of
                                                                                                                                            sugar-sweetened                               Reduction in
                                                                                                                                            beverages                                     tooth decay

*Healthy Life Years are a quantified measure of health impact. One Healthy Life Year is equivalent to one year lived in perfect health.
Or, for example, two years lived with a severe illness that reduces overall quality of life by half (disability weight 0.5).
24   Northumbrian Water Group • Our Contribution                                                                   		25

Measuring the impact of our local expenditure

We have set ourselves an ambitious goal to spend “at least 60p in every £1 with suppliers in our regions”.
Currently we spend approximately 50p in every £1 of our procurement budget with local suppliers.
The impact pathway below shows how our procurement expenditure is expected to contribute to the local
economy in our regions as well as the UK overall.

         INPUTS                        ACTIVITIES                                     OUTPUTS                                         OUTCOMES                               IMPACTS

                                                                                                                   Contribution to local and
                                       Expenditure                                                                 national economies
                                       with local
                                       businesses                Production of
                                                                 goods and services                                    Business profits
                                                                 by NWG suppliers
                                                                                                                                               Gross value added
                                                                                                                                               (contribution to GDP)

       NWG business                                                                                                    Wages
       operations,                     Expenditure                            Demand for
       construction                    with national                          intermediate goods                                                                       Net change in local and
       and                             businesses                             and services                                                                             national GDP and jobs
       maintenance
                                                                                                                       Employment

                                                                                           Production of goods
                                                                                           and services by             Taxes paid
                                       Expenditure                                         other local, national
                                       with overseas                                       and overseas
                                       businesses                                          businesses

The diagram above shows that it is not where a             The impact pathway above shows how our
company is located that really matters, but how it         procurement expenditure is expected to contribute
contributes to the local economy.                          to the local economy in our regions as well as the
In particular:                                             UK overall.
• It is the effect of expenditure on indicators of local   We have in the past used the LM3 tool to estimate
  economic performance that matter, such as                our local economic contribution, and are now
  employment and income, rather than the amount            considering developing a transparent and replicable
  of money spent in a particular location.                 approach to economic impact assessment, focussing
                                                           on economic value and production of clear metrics.
• The extent to which expenditure supports the
  local economy depends on not only the locality of
  expenditure but also the geography of the supply
  chain for goods and services we buy.
26   Northumbrian Water Group • Our Contribution                                                                   		27

SITE RANKING AND NET GAIN TOOLS

We are committed to introducing an environmental           It is a significant step forward to have a way to
‘net gain’ philosophy into our business. The first stage   create a baseline assessment of the biodiversity
in doing this is understanding the biodiversity value      value of our sites. The 550+ sites were assessed by
of what we already have. In 2018 we started looking        the end of March 2019
at what biodiversity valuation tools existed and
                                                           The next challenge was to find the right tool to
what we would like to use. The obvious starting
                                                           enable us to better assess the impact of construction
point was the Defra Biodiversity Metric that had
                                                           or development works on our sites. For this we
been developed for the 2012 Biodiversity Offsetting
                                                           decided to strip the tool back to being closer to the
Pilots. We chose to work with Ecosulis to develop
                                                           original Defra biodiversity metric. We can input the
some bespoke tools that are based on the Defra
                                                           initial value of the land in question, then input any
metric, but modified to enable us to consider some
                                                           habitat to be lost, to be created or to be enhanced –
aspects that we believe are really important.
                                                           looking both on-site and where that isn’t possible
We worked to start valuing our landholding in terms        off-site. The tool shows % changes in biodiversity
of its biodiversity, carrying out habitat value            value, and you can run different scenarios showing
assessments to establish a baseline that we can use        the impact of changes in scheme or mitigation
to inform changes in management, and to identify           design. Many of our projects are quite small so we
where there are opportunities for improvement.             have reduced the scale of the tool from ha to m2 to
                                                           ensure we can pick up the impacts at the right level.
The Habitat Valuation Calculator that we developed
with Ecosulis considers habitat distinctiveness and        We have started to put some projects through this
habitat condition as would be expected, and we then        tool, and are discussing the outputs with the project
added in scores for the presence of priority habitats,     managers with the aim of embedding it into our
priority species, how connected the site is to other       normal working practices in AMP7.
areas of conservation value and the presence or
                                                           Both tools represent a huge step forward for us
absence of invasive non-native species. It is
                                                           to be able to genuinely understand the value of our
heartening to see that the revised Defra biodiversity
                                                           landholding and the impact of our operations on the
metric is now considering connectivity which
                                                           natural capital assets we are responsible for.
supports our inclusion of that. Whilst the Defra
metric focuses solely on habitats, we decided it is
important to us to include a measure for key species
– both ones we would like to see on our sites, but
also those we don’t want there.
We have approximately 2,000 sites, so decided to set
a size limit for initial assessment, and concentrate
on the 550+ sites that are 0.2ha or larger in size.
Once we have assessed these, we will work out a
ranking scale based on biodiversity units, and rank
the sites from say 1 to 5. This will enable us to focus
on keeping our best sites in superb condition, and
work on increasing the value of some of the lower
ranked sites.
28   Northumbrian Water Group • Our Contribution                                                                  		29

KEY DATA                                                                                                          NWG KEY IMPACT
                                                                                                                  & DEPENDENCY
                                                                                                                  AREAS
                                                                                                                                        AREAS FOR DATA DEVELOPMENT

                                                                                                                                                                              16/17
                                                                                                                                                                                       OUTCOME

                                                                                                                                                                                       17/18     18/19
                                                                                                                                                                                                          ANALYSIS

BELOW WE PRESENT DATA AGAINST OUR KEY IMPACT AND DEPENDENCY                                                       NATURAL CAPITAL
AREAS LOOKING ACROSS THREE OF THE CAPITALS - NATURAL,
HUMAN & INTELLECTUAL, AND SOCIAL. OUR DATA THAT RELATES TO OUR                                                                          households water saving MI/d          0.55     0.88      1.06
FINANCIAL AND MANUFACTURED CAPITALS ARE REPORTED THROUGH
                                                                                                                  Water resource        £k invested in water
OUR ANNUAL PERFORMANCE REPORT WHICH IS AVAILABLE ON OUR                                                           management &          efficiency programmes
                                                                                                                                                                              1,607    1,424     1,618
WEBSITE (www.nwg.co.uk).                                                                                          use
                                                                                                                                        No. customers engaged about
                                                                                                                                                                              29,066   48,453    57,608
The data presented represents key impact areas and is all audited data. We took the conscious decision in                               water efficiency
2018 to ensure that future data development is in line with our ambitious goals and outcomes that we have
co-created with our customers and stakeholders for 2020-2025. For this report we are therefore providing an       Waste disposal        % sewage sludge sent to landfill      0        0         0
update of the data we set out last year’s report; showing a three year trend in these key impact areas.

 KEY
                                                                                                                  NWG KEY IMPACT        AREAS FOR DATA DEVELOPMENT                     OUTCOME            ANALYSIS
 Unsatisfactory performance on this measure and more work is needed in this area.
                                                                                                                  & DEPENDENCY
                                                                                                                  AREAS                                                       16/17    17/18     18/19
 Satisfactory performance but below our ambition - an area we will be focusing on.
                                                                                                                  HUMAN & INTELLECTUAL CAPITAL
 Good performance on this measure.
                                                                                                                                        No. people sponsored on internships
                                                                                                                                                                              N/A      42        36
                                                                                                                                        & apprenticeships

                                                                                                                                        No. apprentices employed              N/A      41        31
        NWG KEY IMPACT         AREAS FOR DATA DEVELOPMENT                            OUTCOME           ANALYSIS
        & DEPENDENCY                                                                                              Training, education
                                                                          16/17      17/18     18/19              & knowledge           No. employees undertaking
        AREAS                                                                                                                           upskilling/development under          N/A      >200      161
                                                                                                                                        apprenticeship standards
        NATURAL CAPITAL

                                                                                                                                        No. postgraduate research students
                                GHG emissions (kt CO2)                    187.7      163.5     148                                                                            30       20        25
                                                                                                                                        sponsored
         GHG emissions
                                % of sewage sludge to biogas and
                                                                          100        100       100                                      % employees participating in Just
                                then into renewable energy                                                                                                                    53.2     52.4      48
                                                                                                                                        an Hour

         Ecosystem
                                No. patrols completed to help protect                                                                   No. lost time accidents               17       22        29
         services & land                                                  1,137      2,074     1,836              Employee health
                                our rivers
         use                                                                                                      & wellbeing
                                                                                                                                        % employee engagement survey
                                                                                                                                                                              71       80        75
                                                                                                                                        particpation
                                % bathing water quality compliance
                                                                          100        100       97.06
                                (sufficient or higher)
                                                                                                                                        % employee retention                  89.78    91.48     95.27
         Water & sewage         No. pollution incidents (category 3)      102        58        59
         pollution
                                Leakage Ml/d (Northumbrian Water)         133.82     137.1     136.3

                                Leakage Ml/d (Essex & Suffolk Water)      68.08      66.2      64.5

                                No. properties flooded internally         119        96        124

         Flood attenuation
                                No. properties flooded externally         839        944       902

                                No. repeat sewer floodings (in the last
                                                                          46         38        60
                                10 years)
30   Northumbrian Water Group • Our Contribution                                                                		31

       NWG KEY IMPACT        AREAS FOR DATA DEVELOPMENT                         OUTCOME              ANALYSIS   PERFORMANCE EXCEPTIONS                                     developed around future apprenticeship recruitment
       & DEPENDENCY                                                                                             We are pleased that in the majority of key data areas      as part of our plans for our NWG Academy (see the
       AREAS                                                          16/17     17/18     18/19                                                                            case study on page 57 for further details).
                                                                                                                our performance is meeting our stretching goals and
       SOCIAL CAPITAL                                                                                           is therefore shown as green in the analysis above.
                                                                                                                The following case studies give some examples of our       Just an Hour
                             % compliance with drinking water                                                   highlights in these areas.                                 In 2018, we supported over 600 organisations and 1527
                                                                      99.929    99.938    99.949                                                                           people got involved with our employee volunteering
                             quality standards                                                                  There are 6 areas where our performance has not met
                                                                                                                our expectations, shown as red or amber in the table       programme, Just an Hour. 48.4% of our people
       Customer              No. referrals made for debt                                                        above, and we will be focussing to improve next year.      participated in Just an Hour, which was slightly
                                                                      3,918     2,939     1,638
       engagement &          management support
                                                                                                                These are explained in more detail below.                  below our target of 50%.
       wellbeing
                             Position in CC Water Trust Ratings       1         1         1                     Bathing water compliance                                   2018 was an exceptionally busy year for our people
                                                                                                                                                                           with the training and implementation of our new
                                                                                                                Our bathing waters (sea water at the regions beaches)      customer systems, a big drive to achieve our leakage
                             Net promoter score                       46        44        43                    continue to be amongst the cleanest in the country.        targets and some challenging weather conditions for
                             £m spent by group with                                                             Under the bathing water regulations, each bathing          operational teams. These combined factors made it
                                                                      175       175       198                   water is classified every year as either Excellent,        challenging for some teams of employees to take
                             ocal contractors
                                                                                                                Good, Sufficient or Poor. ‘Sufficient’ is the minimum      work time out to volunteer.
                             £ contribution to environmental,                                                   acceptable standard. Our aim is to contribute to all       In 2019, we have a focused drive into encouraging our
                                                                      613,566   623,897   £962,837
                             community & charitable NGOs                                                        region’s bathing waters being “Sufficient or better”.      people to get involved and realise the benefits of
                                                                                                                Working in partnership is key to making this happen        taking time out from the business to build team spirit
                             No. visits to owned historical sites -                                             as seawater quality can be affected by a number of         and community understanding via volunteering. This
                             Museum of Power, Tees Cottage &          23,512    26,459    26,697                sources, such as run-off from agriculture and urban
                             Ryhope Engines Museum
                                                                                                                                                                           has included our entire leadership cohort leading by
                                                                                                                pollution. It can also be affected by birds or animals.    example and taking part in a volunteer beach clean.
       Community             No. visits to Kielder Leisure            408,000   426,000   422,000               One of our bathing waters, Cullercoats in North            Lost time accidents
       investment                                                                                               Tyneside, deteriorated from Good in 2016, to Sufficient
                                                                                                                in 2017 and Poor in 2018. The rest of our bathing          In 2018 we saw an increase in Lost time accidents. In
                             No. visits to Hanningfield & Abberton
                                                                      97,100    107,800   120,500               waters were all rated Good or Excellent and we             response we continued to ramp up our Everyone
                             nature reserves.
                                                                                                                attained the industry leading position for the highest     Home Safe Every Day initiative. Further details of this
                             £ donated via Branch Out                 56,679    60,037    60,271                percentage of Good (9) and Excellent (24) bathing          programme are given in the case study on page 45.
                                                                                                                waters in England, Wales and Scotland.                     This work culminated in over 1759 employees
                             match funding levered by our Branch                                                                                                           attending one of our safety workshops and 2454
                             Out donations
                                                                      x7.7      x5.9      x30                   Since September 2017, we have been working in              employees attending a safety briefing focussing on
                                                                                                                partnership with the EA and North Tyneside Council         2017’s performance and the use of our 60 Second
                             £ donated via the community                                                        to understand the reasons for the localised decline in     Check tool.
                                                                      23,576    25,153    25,750                bathing water quality at Cullercoats. These extensive
                             foundation
                                                                                                                investigations have already ruled out a number of          When looking at Lost Time Accidents (LTA) as our
                                                                                                                potential factors and the joint investigations will        main measure, the overall performance continued to
                                                                                                                continue until the cause is identified, and all remedial   be disappointing. However, viewing this in the
                                                                                                                works that can be done, have been carried out.             context of a lagging indicator, it is also important to
                                                                                                                                                                           consider our leading indicators which may predict
                                                                                                                Flood attenuation                                          future performance. Our leading indicators that
                                                                                                                We have continued to meet our performance                  measure awareness and focus on safety within the
                                                                                                                commitments for the number of properties flooded           business have improved significantly with over 6,445
                                                                                                                internally and for the number of properties                voluntary 60 Second Checks being completed by
                                                                                                                experiencing repeat flooding. We have flagged this as      employees through their working days. (60 Second
                                                                                                                amber in the data table above, as while we have met        Checks are done either using cards, or a phone app,
                                                                                                                the stretching targets we set, our performance trend       employees answer simple questions that check to see
                                                                                                                has shown an increase in both these areas this year.       if it’s safe to proceed with their job or not). During
                                                                                                                We are undertaking a full review of how we can             these checks 235 jobs were stopped as employees
                                                                                                                dramatically improve our performance in this area.         deemed it was not safe to continue, which is another
                                                                                                                                                                           positive measure.
                                                                                                                Apprentices employed
                                                                                                                                                                           In Spring 2019 we also relaunched our safety systems
                                                                                                                The number of apprentices employed fell from 41 to 31      and procedures with an emphasis on rationalising
                                                                                                                in 2018 due to 10 apprentices moving in to full time       and simplification of processes. We remain
                                                                                                                roles. Due to the extensive transformation                 optimistic that these activities are inducing a long
                                                                                                                programmes and where the current apprentices are           term behavioural and culture change that will lead to
                                                                                                                in their training cycle, no additional apprentices         a positive step change in our LTA performance.
                                                                                                                were recruited in 2018. A strategy is currently being
32   Northumbrian Water Group • Our Contribution                                                                		33

CASE STUDIES
WE HAVE INCLUDED A SERIES OF NEW CASE STUDIES IN THIS YEAR’S REPORT.
HERE’S AN OVERVIEW OF THEM, AND WHICH CAPITALS THEY HAVE AN IMPACT
ON – DEMONSTRATING HOW ONE PROJECT CAN IMPACT ON MANY CAPITALS.
WHILST WE HAVE NOT SPECIFIED THE ROLE OF FINANCIAL CAPITAL WITHIN
THE CASE STUDIES, IT WRAPS ROUND ALL OF OUR PROJECTS - ENABLING
AND ENHANCING OUR INVESTMENT IN THE OTHER CAPITALS.

We have used the symbols shown on page 5 to explain which of the capitals we feel are represented in each
case study.

               NATURAL CAPITAL                                   HUMAN & INTELLECTUAL                       MANUFACTURED CAPITAL                     SOCIAL CAPITAL
                                                                 CAPITAL
               •   Renewable Energy                                                                         •   Killingworth and Longbenton scheme   •   Flo
               •   Leakage innovations                           •   The Water Hub                          •   Horsley water treatment works        •   NWG Academy
               •   Water Rangers                                 •   Responsible Procurement                    upgrade                              •   Water without the worry
               •   Catchment partnerships                        •   Innovation Festival                    •   Rainwise                             •   Great Exhibition of the North
               •   Refill                                        •   Everyone Home Safe Everyday            •   Lound to Gorleston pipeline          •   Powered by Water
               •   Every Drop Counts                             •   Underground digital map                                                         •   Just an Hour
               •   Branch Out                                                                                                                        •   Make My Day
34   Northumbrian Water Group • Our Contribution
                                                                                               35

OUR HIGHLIGHTS IN NUMBERS:

                                                                                              ALL 1,858                              2,000
                              74KM                                                                   OF OUR SITES
                                                                                                         TO BE POWERED BY
                                                                                                     RENEWABLE ELECTRICITY
                                                                                                                                           PEOPLE
                                                                                                                                      ATTENDED OUR 2018
                                                                                                                                     INNOVATION FESTIVAL
                        OF WATERWAYS

                                                                        5,084
                               PATROLLED AT LEAST
                              ONCE A FORTNIGHT BY
                                OUR WATER RANGER
                                      VOLUNTEERS
                                                            EVERY DROP COUNTS
                                                              HOME VISITS COMPLETED IN 2018

                                                                                                               962
                                                                                                           PREMISES
                                                                                               REGISTERED AS REFILL STATIONS
                                                                                                   ACROSS OUR SUPPLY AREAS         27,500
                          31,400
                                                                                                                                     YOUNG PEOPLE

PRIMARY SCHOOL PUPILS
                                                                       4,000                                                       ENGAGED WITH THROUGH
                                                                                                                                   OUR POWERED BY WATER
                                                                                                                                             PROGRAMME

           ENGAGED WITH THROUGH OUR SUPER                          PROPERTIES
                 SPLASH HEROES PROGRAMME
                                                                  PROTECTED FROM FLOODING
                                                               THROUGH OUR RAINWISE SCHEME

                                                                                              £410,000
                      CUSTOMER HEROES ATTENDED
                                                                         6,000                            IN GRANTS
                                      130          EVENTS
                                                                       60-SECOND
                                                                   SAFETY CHECKS
                                                                                                          AWARDED TO LOCAL
                                                                                                    ENVIRONMENTAL SCHEMES
                                                                                                   THROUGH OUR BRANCH OUT
                                                                                                                                     4,200
                                                                COMPLETED BY OUR                            FUND SINCE 2013
                                                                                                                               PEOPLE SURPRISED
                                                                   PEOPLE IN 2018                                                       DURING OUR 2018
                                                                                                                                       MAKE MY DAY WEEK
36   Northumbrian Water Group • Our Contribution                                                               		37

RENEWABLE ENERGY                                                                                               WATER RANGERS
WE ARE LEADING THE WAY IN THE USE OF GREEN ENERGY.                                                             OUR AWARD-WINNING WATER RANGERS COMMUNITY INITIATIVE
NOT ONLY DO WE CONTINUE TO MAKE ‘POWER FROM POO’ THROUGH USING                                                 CONTINUES TO GROW AND HELP PROTECT OUR ENVIRONMENT. VOLUNTEERS
100% OF OUR SEWAGE SLUDGE TO GENERATE ENERGY, A LARGE PORTION                                                  ARE MONITORING 56 PUBLIC ACCESS ROUTES NEXT TO STREAMS, RIVERS,
OF OUR POWER REQUIREMENTS ARE NOW MET THROUGH LONG TERM                                                        BECKS, BURNS AND BATHING WATERS ACROSS THE NORTH EAST.
‘RENEWABLE ONLY’ AGREEMENTS, SPECIFICALLY FROM OFFSHORE WIND
FARMS. THIS HAS ALLOWED US TO COMMIT TO BECOMING A CARBON NEUTRAL                                              Water Rangers patrol over 74 kilometres of              Since the start of the scheme in 2014 until December
COMPANY BY 2027.                                                                                               waterways every week or fortnight, reporting their      2018, a total of 6473 patrols have been completed by
                                                                                                               findings so that any potential pollution can be dealt   volunteers with 380 issues reported to us. There are
                                                                                                               with quickly, as well as looking out for any water      currently 78 Water Rangers and 22 assistant Water
We have signed a long-term agreement with Danish       energy strategy, building upon existing solar, hydro,   leaks on our distribution network and operational       Rangers in the team. The assistants range from
renewable energy specialist Ørsted that will see us    gas to grid and advanced anaerobic digestion (AAD)      issues such as blocked outfalls, missing /              young children to teenagers to dogs who help patrol
take almost a third of our renewable energy demand     power generation. Race Bank Offshore Wind farm is       broken covers.                                          the designated routes.
from an offshore wind farm.                            one of the newest operational wind farms in the UK
                                                       with its 91 Simens Gamesa 6MW wind turbines             Volunteers receive thorough training about what to      In 2018/2019 we had the best performance to date
The 10-year deal, the first Corporate Power Purchase   having been commissioned earlier this year.             look out for and also report on issues such as fly      in terms of issues reported and self-reports to the
Agreement (PPA) of its kind in the UK, is an                                                                   tipping, fallen trees and missing life buoys. They      Environment Agency since the launch of the
expansion of a renewable electricity supply                                                                    have also received awareness training on flood risk     scheme. River Guardians were introduced in
agreement between the companies, which started                                                                 to support the work of the Environment Agency           Teeside where we trained 39 volunteers in pollution
in April 2018.                                                                                                 Flood Warden service.                                   awareness; this was delivered in partnership with
From March 1, 2019, we will source 30% of our                                                                                                                          the River Tees Rediscovered and the
renewable electricity directly from the Race Bank                                                                                                                      Environment Agency.
Offshore Wind Farm, off the coast of Norfolk. The
move further drives our sustainable and renewable
38   Northumbrian Water Group • Our Contribution                                                                  		39

CATCHMENT                                                                                                         LEAKAGE INNOVATION
PARTNERSHIPS                                                                                                      WE ARE DETERMINED TO BRING DOWN LEAKAGE ACROSS

& EU PENINE PEATLIFE
                                                                                                                  OUR NETWORK, AND HAVE BEEN UTILISING A NUMBER OF INNOVATIVE NEW
                                                                                                                  TECHNIQUES TO HELP US ACHIEVE OUR GOAL.

WORKING IN CATCHMENTS IS FUNDAMENTAL TO THE RESILIENCE OF OUR                                                     This includes harnessing the power of space             2018 we launched our new online interactive leak
BUSINESS AND PLAYS A CRITICAL PART IN HOW WE THINK AND OPERATE.                                                   satellites to help us spot leaks on the ground.         map, so make it easier than ever for customers to
WE HAVE A LONG HISTORY OF WORKING IN PARTNERSHIPS AND ACTIVELY                                                    Utilising the same technology that helps find water     report leaks to us.
                                                                                                                  on other planets, we can capture detailed imagery
CONTRIBUTING TO PARTNERSHIPS IN CATCHMENTS ACROSS OUR ENTIRE                                                                                                              The simple online map allows customers to check if
                                                                                                                  that is sent to our leakage technicians so they can
SUPPLY AREA.                                                                                                                                                              a leak has already been reported to us, and send us
                                                                                                                  carry out further investigations.
                                                                                                                                                                          details if we don’t already know about it. Customers
We recognise that looking at the whole catchment       Dales and Forest of Bowland, repairing 1,535ha of          The first phase of activity is primarily focused on     can provide details on the type of leak and even
area is key to making sure we supply clean, clear      damaged areas of blanket bog or ‘peat bog’ over the        large trunk mains that often run through rural areas.   upload their own photos so we can tell how urgent
drinking water that tastes great to our customers      next four years.                                           These are particularly difficult to identify leaks on   it is. Once a leak has been reported to us we provide
now and in the future. In addition to improving                                                                   due to the terrain and the geography of the region.     updates on the action we are taking, so our
                                                       13% of the world’s resource of ‘peat bog’ is found in      The sheer speed of the process, the detail it gives     customers can track the progress we are making
water quality, taking a catchment based approach is
                                                       the UK. Once restored, it provides homes for wildlife,     and the distances the images cover will help us         on repairs.
helping us reduce the risk of flooding and improve
                                                       stores carbon to help combat climate change and            further improve our leakage.
biodiversity. To look after the entire catchment, we                                                                                                                      Our 2018-19 leakage target was 203Ml/d and the
                                                       helps filter clean water. Water quality benefits will be
work in partnership with others.                                                                                  We have also brought a four-legged friend on board      reported figures were 200.43Ml/d. Compared with
                                                       delivered through the project, benefiting the uplands;
By working in partnership, we are able to pool         delivering upstream solutions for the benefits             to help us battle leakage! – Denzel is a springer       the 2017/18 reported figure of 203.22Ml/d, our leakage
resources and knowledge to better understand our       of our downstream customers.                               spaniel who has been trained to sniff out and locate    performance has shown reduction of 2.79Ml/d from
catchments and work more effectively to address                                                                   leaks by recognising the tiniest traces of chlorine     year to year.
                                                       This project is led by the North Pennines Area of          use to disinfect our water supplies.
any environmental issues.
                                                       Outstanding Natural Beauty (AONB) Partnership in
We have been looking ahead to what we hope to          collaboration with Yorkshire Wildlife Trust and            Our customers can also be a great help to us by
achieve in 2020-25 and launched our new                Forest of Bowland AONB Partnership. It is financed         reporting leaks to us when they see them so we can
partnership scheme ‘Improving the Water                by the European Union’s LIFE Programme,                    investigate and fix them as quickly as possible. In
Environment’ in July. We’ve also been engaging         Environment Agency, Yorkshire Water and United
our partners in our proposals for holistic             Utilities. We also help finance the project and sit on
catchment projects in the South Tyne and in Essex;     the board of the partnership, advising on peat
and in developing catchment approaches to              restoration, supporting with water quality sampling
balancing nutrients.                                   and monitoring in the uplands. The project will also
                                                       test innovative ways of funding, identifying new
A key catchment partnership project that we
                                                       approaches to paying for environmental
continue to be involved in is the £6 million Pennine
                                                       improvements with multiple benefits for everyone.
PeatLIFE project. This started in November 2017 and
will focus on areas of the North Pennines, Yorkshire
40   Northumbrian Water Group • Our Contribution                                                                		41

EVERY DROP COUNTS                                                                                               REFILL
OUR AWARD WINNING WHOLE-TOWN APPROACH TO
DELIVERING WATER EFFICIENCY, EVERY DROP COUNTS, DEVELOPED                                                       REFILL IS A NATIONAL TAP WATER DRINKING CAMPAIGN LED BY THE PLASTIC
FURTHER WITH A GREATER FOCUS ON CHANGING BEHAVIOUR.                                                             POLLUTION CAMPAIGN GROUP CITY TO SEA. IT AIMS TO PROVIDE A NETWORK
                                                                                                                OF CAFES, SHOPS, HOTELS AND OTHER BUSINESSES THAT WILL REFILL
This year we completed 5,084 home visits through       children to make a positive difference through the       PEOPLE’S REUSABLE BOTTLES WITH TAP WATER FOR FREE, REDUCING
Every Drop Counts, split between Washington and        way they use water.                                      RELIANCE ON SINGLE-USE PLASTICS.
Barking. We helped our customers achieve average
                                                       This year we also offered a free water saving visit to
measured savings of 22.2 litres/property/day in
                                                       customers who are on our reduced tariff or our           Our campaign started from a conversation with           We have worked with volunteer groups to launch
Washington, and in our southern area, in Barking,
                                                       arrears support scheme and were pleased to have          City to Sea at our 2017 Innovation Festival. We         their own local Refill schemes within our supply
our customers achieved an average measured
                                                       nearly 500 customers taking up the offer.                launched in Durham in November 2017 and have            areas, and have been working with our partners,
saving of 39.8 litres/property/day.
                                                                                                                now rolled out the campaign across all of our           such as Essex Wildlife Trust, to encourage them to
Our exciting new children’s play, Super Splash                                                                  operating areas with almost 1,000 local businesses      get involved and support the scheme.
Heroes, has built on our previous primary school                                                                across our supply areas registered as Refill stations
                                                                                                                                                                        In September 2018 we took part in the first ever
work, engaging with over 31,400 pupils in 198                                                                   by the start of 2019.
                                                                                                                                                                        ‘National Refill Day’, taking to the streets of
schools on water efficiency over this year. The
                                                                                                                Other water companies followed our lead, joining        Newcastle and Brentwood to spread the word about
premise behind Super Splash Heroes is that every
                                                                                                                forces in an industry-wide approach to the              Refill and urge local businesses to sign up. A second
single child has the potential to be a Super Splash
                                                                                                                campaign. The goal for the network is to extend to      National Refill Day is being planned for June 2019.
Hero. The characters are children who transform
                                                                                                                every city and town in England by 2021. The Refill
into heroes by changing their attitudes to using and
                                                                                                                smartphone app can be used to register a business
saving water. The play aims to demonstrate how
                                                                                                                and find your nearest Refill station, and there are
people can make little changes that will have a big
                                                                                                                special blue stickers in shop windows. It is
impact on the world around them and to inspire
                                                                                                                estimated that the scheme will cut plastic bottle use
                                                                                                                by tens of millions each year, as well as increasing
                                                                                                                the availability of high quality tap water.
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